Research On The Electricity Pricing Model

As the electricity industry in the world being deregulated and introduces competition gradually, the requirement of electricity pricing reform arises. This dissertation introduces an adequate electricity pricing function after the study of regularization on electricity market structure as well as analyses the shortage of current electricity price mechanism and advances some ideas to amend it. The history of evolution on electricity industry structure shows that it is necessary to introduce the market competition mechanism in electricity industry. This dissertation set a base for electricity industry competition by the discussion of vertical separation from traditional vertical integrated electricity generation, transmission, distribution and retail. In each sector, the author notices that the features of natural monopoly still in exist, thus the electricity transmission and distribution still remain in a certain natural monopoly even though they don't take part in the competition of electricity industry. According to the theory of "SCP", the development of function of electricity pricing must adapt to the market-oriented reform of electricity industry. The author believes that in the process of market-oriented reform of electricity industry in China, our present national situation must be considered seriously. Different pricing mechanism has different efficiency and historical background, and the author analyses several important electricity pricing models systematically from the accounting cost pricing model of 1980s to finance derivative tools pricing model nowadays, and analyses the advantages and disadvantages of each model in different aspects. Based on the above analysis of electricity market structure and electricity pricing model, the dissertation introduces the mixing pricing model of two-part tariff pricing model and future contract pricing model and gets the best contract electricity quantity. Such model can not only solve the problems such as market supply shortage, high risk of electricity transaction, instability of electricity price and etc, but can adapt to our national situation and the present market-oriented reform of electricity industry. This dissertation is innovative in the field of research of electricity market structure and electricity pricing model. The well combination of market structure and electricity pricing mechanism can promote the electricity industry, and it is meaningful to the theory of future electricity market competition and policy making.